Chamber at-a-glance

In the end, Ellen van der Horst was asked to leave so the Cincinnati USA Regional Chamber might more effectively compete with other regions for new business and jobs.

It’s not that she had done a bad job in her seven years as CEO. Her bosses on the chamber’s board have praised her day-to-day operational skills and ability to develop key initiatives and help the organization grow during a time of great economic turmoil.

And for her efforts they paid her well: $625,000 in 2011, according to the chamber’s most recent Form 990.

But the chamber wasn’t pushing ahead with the full influence its backers expect, either. They say the chamber’s next CEO must fully engage the region’s powerful chief executives, using his or her clout to recruit new companies and spur growth in high-paying jobs.

“I couldn’t agree more,” van der Horst told The Enquirer. “It would be a game-changer for our community if top business leaders got directly involved in recruiting companies here. And with our new economic development strategy in place, now is the time for the new CEO to engage the business community.”

As the Cincinnati USA Regional Chamber begins a nationwide search for van der Horst’s successor, it’s also drawing new directions for its future.

Interviews with a wide swath of senior executives in and outside the chamber make it clear that the new CEO will be expected to collaborate more effectively than ever with leaders of other powerful organizations that have been revitalized, reconfigured or created from scratch in recent years.

The new CEO will be expected to review the current structure of a chamber that represents more than 5,000 member businesses and employs 75 professional staffers. Staffers manage a broad portfolio of member services, economic development and government advocacy. Several executives and investors wonder if some chamber programs, particularly economic development, should operate as standalone entities.

“It’s certainly not a nimble, streamlined operation,” Hamilton County Commissioner Greg Hartmann said. “I think they really need to get more focused on what their mission is and go from there.”

A search committee of business leaders expects to have a new CEO in place by year’s end. Mel Gravely, incoming chamber chairman and president and CEO of TriVersity Construction Co., is leading the search. Local executive recruiting firm Baldwin Gilman LLC and strategic planning firm Pathway Guidance LLC have been hired to help.

“This is a moment where there’s so much happening in such incredibly short order,” said Kay Geiger, current chamber chairwoman and PNC Bank president for Greater Cincinnati and Northern Kentucky. “We each have a role to play, but what we have to do is collaborate as a team to make this really work in the future, and that’s where our next chamber leader comes in.”

Chamber's mission is to help members succeed

Established in 1839,the chamber’s core mission is to enhance the economic vitality and quality of life in the 15-county metropolitan area, which essentially means helping its members succeed.

As the largest business group in the region, the chamber helps members save costs on benefits programs including health care and workers’ compensation. It helps recruit new companies and represents the region’s business interests locally and in Columbus and Washington, D.C.

The chamber’s annual budget isn’t public; the state, city of Cincinnati and Hamilton County contributed at least $100,000 each this year to its economic development arm, which also received investments from several other townships and cities. Member companies pay chamber dues based on the number of full-time employees. A 40-person firm pays $1,000 in basic dues; a 400-person firm pays $3,025, according to the chamber’s calculator.

Business leaders say the chamber’s next CEO will have to mind traditional core missions – plus some new ones. Tops on the list is collaborating with other powerful organizations that have interests – particularly in economic development and government relations – that intersect with the chamber’s. The next CEO will be navigating a very different landscape than the one van der Horst inherited seven years ago.

The Port of Greater Cincinnati Development Authority has been restructured to play a larger role in major commercial real estate development, and the Cincinnati Center City Development Corp. (3CDC) is revitalizing whole blocks Downtown and in Over-the-Rhine, creating a magnet for companies looking to expand or relocate.

The Cincinnati Business Committee, made up of CEOs from the region’s largest employers, has become more active in recent years and launched projects including Cintrifuse, an effort to identify and support high-potential startups. The chamber CEO is a CBC member and has standing time to speak at each meeting.

And now there’s the Cincinnati Regional Business Committee, or CRBC, which launched late last year. CEOs from 52 mid-sized companies each contribute $15,000 a year to fund the group’s work on education, economic development and government affairs.

The Build Our New Bridge Now Coalition, announced last year by former chamber chairwoman Julie Janson, is an example of a coordinated effort among these organizations.

Representatives from the Cincinnati and Northern Kentucky chambers lead lobbying efforts in Columbus and Frankfort for financing to replace the aging Brent Spence Bridge. They work with coalition co-chairs Tom Williams, Mike Michael and Bobby Fisher – all CEOs and CRBC members – who interact with the state governors and top federal officials on a peer-to-peer basis.

The end result: The coalition speaks with one loud, unified voice.

Relationship with state officials important

Top executives say there hasn’t been enough of that kind of collaboration in economic development efforts – critical as cities from Covington to Mason aggressively pursue companies looking to relocate.

Columbus’ pro-business administration is funneling millions into six economic development organizations across the state, including the Cincinnati USA Partnership for Economic Development, which the Chamber manages. In 2012, the Partnership raised $5.2 million in funding. Of that amount, $2.4 million came from the state, and another $627,000 came from local public sources.

That means the chamber CEO and partnership director also must have a solid working relationship with the governor and head of JobsOhio, the state’s lead economic development organization.

Gov. John Kasich has told local executives he thinks the Cincinnati USA Partnership is underperforming, a characterization with which multiple partnership investors agree. The strategy is right, they say, but the execution has been spotty.

JobsOhio ranks the state’s six economic development agencies on jobs created and company capital investment commitments. In public and private evaluations by the state, the local partnership’s performance has been mixed.

For the first half of 2013 the partnership ranked fourth in both categories, according to JobsOhio’s recently released second quarter report, which is public.

The state also issues an internal scorecard in which the partnership was ranked fifth for the last half of 2012.

Van der Horst said she has not seen a scorecard for the first half of 2013, and it’s not clear if the state will issue one.

Executives say the partnership has failed to leverage outside assets – most notably chief executive officers across the region – who are ready and willing to assist in efforts to recruit new companies. These executives don’t expect to land a 15,000-job behemoth, but they say the region is missing opportunities to bring in 500-person employers because organizations including CBC and CRBC are often out of the loop until it’s too late.

Imagine a coordinated effort, executives say, in which three high-powered CEOs join chamber personnel on a recruiting trip and bring Mr. Redlegs and Who Dey along for good measure. Imagine a CBC executive learning a prospective company is led by a fraternity brother, sorority sister or MBA classmate.

The CEOs of companies like Kroger and Procter & Gamble can make a call, but they have to be asked.

Some stakeholders question whether the partnership would be more effective as a stand-alone entity, a model that other cities, including Dayton, use. Gravely said that’s not something the CEO search committee is currently discussing.

“Everybody’s got an opinion, and I respect all of their opinions,” Gravely said. “But here’s the bottom line: We are not only in the economic development business, we are in the center of it. And that ain’t going to change.”

Dave Dougherty, the former Convergys CEO who led the partnership for 13 months, said it’s always good to re-evaluate any model, but he cautioned that there are significant synergies and savings by keeping the partnership as part of the chamber.

“You look at different cities, and there are lots of different answers,” he said. “I concluded it should stay at the chamber because it saved about $1 million a year in shared services. You didn’t have to have your own separate IT and payroll.”

Gravely and Dougherty say any evaluation of the partnership’s performance also must include a strong dose of perspective. Dougherty, whom van der Horst recruited to serve as the partnership’s executive director from March 2011 to March 2012, oversaw a strategic shift that calls for focusing on growth by existing businesses first and attracting new companies second. That’s consistent with JobsOhio’s strategy, but it wasn’t fully implemented until late 2012.

The partnership also has a geographic disadvantage when it comes to JobsOhio rankings. JobsOhio doesn’t include job creation and capital investment in Northern Kentucky or Southeast Indiana, though they are part of the chamber’s territory.

Whatever the ultimate structure, there will be new leadership at the partnership and the opportunity for a fresh start with investors. Denyse Ferguson, who was named the partnership’s executive director in February 2012, resigned from that position in late August without comment. Matt Davis, formerly the chamber’s vice president for government affairs, was named the partnership’s interim executive director Sept. 4. Davis is highly regarded among business leaders and among state and federal lawmakers.

The partnership includes an informal advisory board made up of investors, but the executive director ultimately reports to the chamber’s CEO. Which is yet another reason why collaboration is Job One for van der Horst’s successor, executives say.

“It’s an important time for the chamber,” said Dinsmore managing partner George Vincent, the 2011 chamber chairman and member of its senior council. “The new chamber leader’s going to have to wear many hats, and wear them all well.” ⬛

I will give you a new perspective on local executives and the region’s entrepreneurs – and why both matter to you. Find me at LinkedIn, Facebook and jpichler@enquirer.com.